From [HERE] Four fair housing have organizations released their joint findings after a year-long investigation  into the ways that banks secure, maintain, and market the foreclosed properties they own. “Here Comes the Bank, There Goes Our Neighborhood: How Lenders Discriminate in the Treatment of Foreclosed Homes,” reports the results of an investigation of 624 real estate-owned (REO) and distressed properties located in Washington, D.C.’s Maryland suburbs; Dayton, Ohio; New Haven and Hartford, Conn.; and Richmond, Va. The investigation found that banks are discriminating in the treatment of their properties, as they generally take greater care to maintain and secure the properties that they own in white neighborhoods than they do in African-American neighborhoods.

The National Fair Housing Alliance (NFHA) in Washington, D.C. and three of its member organizations—the Miami Valley Fair Housing Center in Dayton, Ohio; the Connecticut Fair Housing Center in Hartford, Conn.; and Housing Opportunities Made Equal in Richmond, Va.—evaluated the maintenance of REOs in their local area on a 100-point scale, subtracting points when properties were poorly maintained or created an eye sore with poor curb appeal. Although many properties in pre-dominantly White neighborhoods received passing grades and had well-maintained and trash-free lawns, secured entrances and generally nice upkeep, the properties in minority neighborhoods were more likely to receive below average or failing grades due to cracked foundations, leaky roofs and “warning” signs out front.

“In the aftermath of the foreclosure crisis, we are again seeing banks behave in a way that raises civil rights concerns,” said Shanna L. Smith, NFHA president and chief executive officer. “By failing to maintain properties in African-American neighborhoods in the same way that they maintain similar properties in white neighborhoods, banks are undervaluing properties and helping to stall economic recovery in our nation’s neighborhoods of color. Banks that own foreclosed homeshave a fiduciary duty to their investors to secure a fair price for the homes, and they have an obligation to neighborhoods and communities to maintain those homes. Following best practices will help stabilize property values, encourage community reinvestment and increase the local tax base at a crucial time in our economic recovery.”

The groups contend that banks risk violating the Fair Housing Act when they fail to maintain REOs in African-American and Latino neighborhoods, as they must provide these services without regard to the race or national origin of residents living in the areas in which the properties are located. The Fair Housing Act makes it illegal to discriminate based on race, color, national origin, religion, sex, disability or familial status. This law applies to housing and housing-related activities, which include the maintenance, appraisal, listing, marketing and selling of homes.

“Here Comes the Bank, There Goes Our Neighborhood: How Lenders Discriminate in the Treatment of Foreclosed Homes” concludes with several recommendations:

►Banks must take affirmative steps to maintain, market, and sell all properties they own,
according to fair housing best practice standards;

►Federal regulators and enforcement agencies must examine the ways in which banks and
the vendors that they hire conduct this business; and

►Local municipalities and residents must remain vigilant to ensure that the concentration
of bank-owned properties is not impeding fair housing choice.